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Education · Technical Analysis · Chapter 2 of 4

Simple indicators

6 min02 / 04

An indicator is a calculation layered on top of price data that presents information visually. Two of the most useful for beginners: Moving Average and RSI.

Moving Average (MA)

MA averages price across the last N candles. MA20 means the average of the last 20 candles. The larger the number, the smoother the line, and the slower it reacts.

Fast MA (MA20)Slow MA (MA50)Price
Two MAs with different periods reveal trend direction and crossover points.

Simplest usage: price above MA = bullish bias, price below MA = bearish bias. When a fast MA (e.g. MA20) crosses a slow MA (e.g. MA50) from below to above, that's a common upside momentum signal known as a golden cross.

RSI (Relative Strength Index)

RSI measures the speed of price change on a 0–100 scale. It shows in a separate panel below the chart.

703050
Above 70 is generally overbought. Below 30 is generally oversold.

Use RSI to gauge trend exhaustion, not as a standalone reversal signal. In a strong uptrend, RSI can stay above 70 for a long time, exiting too early is a classic beginner mistake.

Start with one indicator until you understand its behaviour. Piling on indicators without understanding them just adds noise.

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